TL;DR:
- Shake Shack faces a proxy challenge over its marketing claim that its chicken sandwiches are “hormone- and antibiotic-free.”
- The Accountability Board, led by former HSUS executives, demands proof of the “hormone-free” claim or a risk analysis publication.
- Shake Shack has petitioned the SEC to exclude the shareholder proposal from its proxy statement, arguing it’s updating its marketing to align with common retail labelling practices.
Shake Shack Inc. is currently embroiled in a proxy fight centred around the validity of its “hormone-free” chicken marketing claim. The fast-casual chain has sought the Securities & Exchange Commission’s (SEC) approval to omit a shareholder proposal from its upcoming proxy statement, which questions the accuracy of its “hormone- and antibiotic-free” chicken sandwich claims.
In November, The Accountability Board, initiated by ex-HSUS executives Josh Balk and Matt Prescott, challenged Shake Shack to substantiate its “hormone-free” chicken claim or to undertake and disclose a risk analysis concerning the assertion. The Accountability Board, which invests in companies and tracks their shareholder commitment adherence, has put the spotlight on Shake Shack’s marketing practices.
Shake Shack’s plea to the SEC, submitted this month, seeks assurance that the agency would not pursue enforcement action should it decide to exclude the shareholder proposal from its proxy statement. The company argues that it is in the process of revising its marketing materials and menus to feature the phrase “no added hormones,” a claim commonly seen on retail chicken labels. This adjustment also includes a disclaimer stating that “federal regulations prohibit the use of hormones in chicken.”
This marketing claim, though legally permissible, contributes to widespread consumer confusion, with 62% of consumers finding “chicken labels and packaging confusing,” according to a report by the National Chicken Council. Shake Shack’s ongoing dispute highlights the broader issue of clarity and transparency in food labelling and marketing within the industry.
